1. Negotiating on the price of the home only. Some sellers may take less than the asking price of the home, but not all of them will. It’s important for you to understand the seller’s priorities. If the price isn’t negotiable, what about repairs? Perhaps offering a more convenient closing date will help them make concessions in other areas. The more you know about the seller’s priorities, the more you’ll be able to work with them to achieve yours. Be creative! Here are some elements to a purchase that you might want to put on the negotiating table:
• Amount of Earnest Money with the offer
• Closing and possession dates
• Proration of taxes, utilities, and rents
• Payment of inspections or other fees
• Payment of other closing costs
• Personal property to be included in the sale
2. Acting too eager to buy. It is important to let the seller know that you are motivated, but you don’t want the seller to know that you are too eager and willing to do anything to get the house. This starts even before you make an
offer. The first time you see a house, you might immediately know that “this is the one!” That’s fine, but don’t telegraph that information to the seller. Don’t let the seller see you get excited. Calmly ask questions, take some notes, and say as little as possible.
3. Not making sure the Sellers know you are serious and qualified. Sellers generally do not accept offers and remove their home from the market when they do not believe the buyer is serious and able to go through with the transaction. You’re offer is much more likely to be accepted when the sellers know you are serious about buying their home. A large earnest money deposit submitted with the offer is the first thing they will look at. The next thing they will look at are the contingencies in your offer. Most offers do and should contain some contingencies (see #5), but there should be as few as possible and none of them should lead the seller to think you’re just trying to leave yourself a way out if you simply change your mind. Making sure the sellers know that you are already pre-qualified for a loan is also very important (see #6).
4. Losing a great deal by hesitating. The extreme opposite of Costly Mistake #3 is not acting quickly when you really do find a great deal. Great deals do not stay on the market very long. Assuming you’ve done your homework and understand the home values in your market, when you find a truly great deal – jump on it! You will still not want to pay full price or make a high initial offer, but you will want to enter into intensive, and high speed negotiations to insure that it doesn’t slip through your fingers. If you fail to act quickly enough don’t despair – see mistake #3.
5. Making a non-contingent offer. Avoid making a non-contingent offer if you can. A contingent offer is simply an offer where certain conditions must be met before you will complete the sale. Most offers should be conditional or contingent upon a thorough inspection to make sure the home is in good shape, a professional appraisal, and favorable financing. If not, you may lose your deposit if you later discover a problem and want to back out of the sale. Think about potential issues or problems that might prevent you from wanting to close the sale and make sure to put those contingencies in your offer.
6. Not pre-qualifying for a loan. When you begin negotiating with a seller it’s important that you do so from a position of strength. Remember, for every serious buyer, the seller has had to waste a lot of time with tire kickers and
looky-lou’s. You want the seller to know you’re a serious buyer and one of the best ways to do that is to show him that you have been approved for financing. The #1 reason that a sale falls apart is because the buyer can’t get a loan. You’re far more likely to get a great deal if the seller knows that financing won’t be a problem. In fact, if YOU don’t know that you can get financing (or for how much) why are you even looking for a home? Knowing how much
financing you’ll qualify for is as important to you as it is to the seller. If you would like to know how large a loan you qualify for, you can have several lenders evaluate your credit and give you a quote by going to http://finance.mhvillage.com.
7. Not understanding the local housing market dynamics. Do you know what’s happening right now in the housing market where you want to buy your home? If you don’t, it’s like buying a home blindfolded with one arm tied behind your back. You must do your homework. What are other similar homes listed for? How much have other similar homes recently sold for? What’s the average size, price, etc. of a mobile home in this market? One of the best
places to get that hard-to-find market information is a “Home Value Analysis” from MHVillage. In fact, you may have even received this guide when you purchased one. The question is, “Have you studied it to know how the home
you’re interested in compares to the ones that have recently sold?” There is no substitute for doing your homework if you want to get a great deal. Make sure you click on the “Check Value” link on every MHVillage listing to get a Home
Value Analysis Report on any home you’re seriously considering.
8. Not retaining a professional to help you through the home buying process. If you’re not working with a professional (a R/E agent or mobile home broker, etc.) you need an attorney. In many cases you should have an attorney even if you are working with a professional. Your home will probably be the largest investment you make. Trying to save a few hundred bucks by not retaining the proper professionals is “penny wise and pound foolish.” Nothing we’ve said in this short article or any of the other material available from MHVillage should be construed as legal or financial advice. It’s not. We are neither attorneys nor financial counselors. Make sure you get professional legal and financial advice before making the biggest purchase of your life.